The Bank of Canada raised its Bank Rate today by ¼ of one percentage point to 5½ per cent. The operating band for the overnight rate was correspondingly increased, and the Bank’s target for the overnight rate is now 5¼ per cent.

In a speech today to the Canadian Society of New York, Bank of Canada Governor Gordon Thiessen talked about Canada’s experience with a floating exchange rate and an independent monetary policy, despite close integration with the much larger U.S. economy.